Semen Gresik says Govt’s cement jv plan unnecessary

26 January 2005

Satryo, the president director of Semen Gresik, said Tuesday the government’s plan to build a joint venture in the cement industry as part of a dispute settlement with Cemex Asia Holding, is not necessary. He said there was no need for the government to let Cemex take part in the building of cement plants. He said his company would need a new cement plant to cope with increasing demand, but it was capable of building it on its own.

Gresik announced the company’s readiness to fully finance the constructions of new factories estimated to take US$350m to realise. The factories are going to have production capacities of 2.3-2.5Mt of cement. At the moment, the state cement enterprise has US$100m cash and can borrow up to US$250m. "We can get an US$250m loan and will require no other investor," Gresik’s president told reporters yesterday.

The new cement factories, he confided, would be built in Central Java, West Java, and Central Kalimantan. "To be sure, we will not build them in Tuban."

On Monday, State Enterprises Minister Sugiarto said the government would sign a memorandum of understanding with Cemex, which among others would provide for the establishment of a joint venture in the cement industry.

Meanwhile...Cemex Asia hopes it can reach a settlement with RI government in PT Semen Gresik case by February 28, 2005. "We haven’t sealed any deal with the Indonesian government. However, we will continue negotiating and hope to reach a settlement by February 28, 2005," wrote Cemex Asia in its written statement yesterday.

Coordinating Minister for Economic Affairs Aburizal Bakrie revealed no settlement had been reached because both disputing parties still had different perceptions on some legal terminologies. "The differences will be further discussed by the respective legal advisors," he said after meeting President Susilo Bambang Yudhoyono in the Presidential Building yesterday.